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<nettime> from the dotcom observatory (january-june 2003)
geert lovink on Sun, 15 Jun 2003 05:16:41 +0200 (CEST)


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<nettime> from the dotcom observatory (january-june 2003)


(The observatory may have slowed down a bit but still is in operation.
Thanks to those who contributed to this edition (Peter Lunenfeld, Ted
Byfield). I just finished Andrew Ross' No-Collar and hope to write something
about it shortly. John Cassidy's DotCon is widely available now as a
paperback, for those who look for an ABC intro into Dotcommania. There are
many, many books out about Enron but I have not yet made up my mind which
one to read. Any suggestions? Sit back and wait until New Press releases
Doug Henwood's long awaited dotcom study in a few months time, which he had
to rewrite a couple of times, for instance from present to past tense.
Dotcom news has stabilized and circles around a few topics such as Martha
Stewart, Enron, MCI/WorldCom and corporate crime in general. For those
interested in daily news I still recommend www.fuckedcompany.com. Oh, and
David Hudson started blogging: http://www.rewired.com/blogger.html. Ciao,
Geert)

1.   Froma Harrop: Free Martha Stewart
2.   NYT: Deception, or Just Disarray, at Enron?
3.   WP: WorldCom Agrees to Pay $500 Million
4.   Steve Lohr: 'New Media': Ready for the Dustbin of History?
5.   Google: Forget Moore's Law
6.   Enron art auction takes in $1 million for creditors
7.   Turner, Case, Barksdale named in AOL fraud suit
8.   'TIME-TRAVELER' BUSTED FOR INSIDER TRADING
9.   Anniversaries that Wall Street would prefer to waltz away from
10. Dot-Com Saviors, Tilting at the World's Ills
11. Higher Profits, Lower Taxes
12. Economic headlines
13. Tiny Dot-Com Promotional Object Found In Drawer
14. "executive MBA/OPM"
15. Now Corporations Claim The "Right To Lie"

--

1. Froma Harrop: Free Martha Stewart

The Feds have charged her with conspiracy, obstruction of justice and
securities fraud -- all over a stock trade that paid her $42,000. An entire
lifetime of daily deals like this would have been a slow afternoon for Ken
Lay, the former Enron chief who still walks the earth unindicted.

Such investigations are time-consuming and expensive. Yet somehow the FBI,
the Securities and Exchange Commission and the U.S. attorney in Manhattan
found the time and money to go after Martha Stewart. What justified this
relentless woman-hunt?

 Stewart had two marks against her:
1) She spoke ugly truths about American family life
2) She was a tough broad.

In marketing the domestic comforts, Stewart talked about little things, like
collecting vintage dish towels and making envelope linings with rubber
stamps. But they added up to a larger theme that many rightly regarded as a
rebuke to modern America: For all their talk about family values, many
Americans have traded the hearth for the workplace. Their hearts are into
earning more, in order to spend more. Gracious family living, a concept
nurtured more by time than income, has all but died.

Deep down, Americans feel somewhat guilty about having made these
trade-offs. Many try to suppress the message by attacking the messenger.
Thus, defenders of the slob culture portray the fussy Stewart as a monster.
Or they lampoo her as the "Dominatrix of Domesticity."

Stewart herself has acknowledged that she hits a raw nerve. Speaking before
the National Press Club six years ago, she explained: "With women,
particularly, going off to work, and leaving our families in the care of
others, leaving our houses to housekeepers' care or nobody's care, I know
that we had sort of lost touch, that we had kind of unbalanced our lives
very seriously."

It's true. Family dinners have nearly disappeared. While kitchens get bigger
and clever appliances multiply, people cook less. Rather than spending more
time with their children at home, Americans have chosen extra hours at work
and long commutes so they can afford bigger houses and massive vehicles. The
children are basically raising themselves, and not necessarily doing a good
job of it.

Sure, Stewart can get silly. One thinks of her instructions for carving cups
out of cucumbers to serve sake, the potent Japanese drink. And her obsession
for the best of everything promotes materialism. But her overriding theme is
not about pearls and antique silver tea accessories. It's about maintaining
standards -- the core of which is taking the time to keep an attractive and
orderly house. It costs little to make Christmas-tree ornaments and nothing
to properly clean Venetian blinds.

Spring is about to melt into summer. In the old days, housekeepers would be
engaged in a frenzy of "spring cleaning." They'd be scrubbing kitchen
cabinets and laundering curtains. How many of you out there have done your
spring cleaning? C'mon, don't all raise your hands at once.

It's easy to focus on Martha's personal contradictions. The honey-voiced
promoter of the home arts is also a driven businesswoman. She can be
unpleasant and intimidating (not unusual traits in a male CEO). Back at
court, a high SEC official describes Stewart's role as that of a "tipee":
someone who sells stock based on a tip from a corporate insider. Insider
trading is illegal, but if the Feds were really serious about going after
tipees, they'd be smashing up cocktail parties from Manhattan to Maui.

Stewart wasn't actually charged with insider trading -- only with lying to
investigators about her reasons for selling ImClone stock. But if she
refused to come clean, I can't entirely blame her. The Feds were simply out
to nail the scalp of another unapologetic female, probably next to the
hairpiece belonging to Leona Helmsley, the sharp-tongued hotel executive
jailed for minor-league tax evading. Should Stewart have let her business
empire fall to pieces because investigators wanted headlines?

Stewart understands exactly why she is where she is. She's fighting the
charges. As someone forever in Stewart's debt for showing me how to neatly
fold fitted sheets, I'm cheering her on. And if she should end up in jail, I
have every intention of sending her an orange chiffon cake -- with a file in
it.

Froma Harrop is a Journal editorial writer and syndicated columnist. She may
be reached by e-mail at: fharrop {AT} projo.com

--

2. NYT: Deception, or Just Disarray, at Enron?
BY KURT EICHENWALD and JOHN MARKOFF

After more than a year of investigation, the collection of millions of pages
of documents and interviews with an untold number of witnesses, federal
prosecutors last month brought their most sweeping fraud indictment in the
Enron case, charging a group of executives with illegally pumping up the
company's stock price by lying about the existence of certain Internet
technology.

But now, whether anyone charged with those crimes will ever go to jail may
rest in part in the hands of an unlikely group of people, including Drew
Carey, Shania Twain, Pete Sampras and some fans of independent short films.
The reason is simple. The defense is expected to argue that Enron
possessed - at various levels of quality - the technical ability it claimed.
And the proof, say software specialists from Enron and other industry
executives,
lies in part in the technical features that the company offered while
streaming video over the Internet for Mr. Carey's comedy show, the 1999
Country Music Awards, the Wimbledon tennis competition and a Web site that
provided an assortment of independent short films.

Indeed, for all the seemingly black-and-white fraud allegations that have
roiled Enron, the charges involving technology deception may present far
more gray. At bottom, the technology in Enron's Internet division - Enron
Broadband Services, or E.B.S. - may have been more developed than the
indictment suggests, presenting prosecutors with some complex challenges.

That is the conclusion drawn from interviews with an array of the unit's
former customers, suppliers, consultants, employees, partners and
competitors. Many of them argue that the charges about technology reflect
not criminal activity but the disarray and disappointment that typically
accompany product development in the computer industry. In that world,
claims are made for a technology's abilities long before commercially viable
products are available - and, sometimes, results fall short of hopes.

"If they succeed in convicting the Enron developers," said an executive at a
major computer hardware manufacturer who was never employed by Enron but who
had direct knowledge of its systems, "anyone in Silicon Valley can be sent
to jail."

 Former Enron executives voice similar opinions. "I do not think the
technical capabilities were overstated," said Larry Ciscon, former vice
president for software engineering. "And comparing E.B.S. to the other
software companies I've seen in my 15 years in the software industry, I did
not see anything outside of the standard product-development process."

Prosecutors, however, say they have no doubts about their charges. "We have
full confidence that the proof at trial will bear out the allegations in the
indictment," said Leslie Caldwell, head of the Justice Department's Enron
task force.

None of this means that the Enron broadband unit was well run or that its
business prospects were not exaggerated. Executives may have boasted of
technological capabilities long before they were available, and financial
illegalities could also have taken place. Indeed, large portions of the
broadband
indictment against seven former E.B.S. executives pertain to accusations
that the division manipulated its reported income through the use of the
same types of off-the-books partnerships that played a huge role in Enron's
collapse. Such dealings led to criminal charges against several executives,
including the former chief financial officer, Andrew S. Fastow.

Moreover, there is plenty of the type of evidence that might convince a jury
that insiders knew something was amiss inside the broadband division. The
executives charged in the criminal case sold millions of shares of Enron
stock as the price was soaring over excitement about broadband. That has led
to
criminal charges of insider trading, with the government arguing that the
executives lied about the division's capabilities for the purpose of pumping
up the
stock price so they could dump their shares. For that accusation to stick,
however, the government will have to prove not only that the statements were
untrue, but that the defendants knew it.

But the primary charges against four of the seven defendants - Kenneth Rice,
Joe Hirko, Scott Yeager and Rex Shelby - state that certain software-driven
functions promoted by Enron as available on its network were not.
Prosecutors contend that Enron executives falsely said that the company had
products for shipping and streaming video and other media over the Internet
to corporations, and that it could meter and bill customers based on use, as
well as allow customers to select qualities of service and schedule times
for shipping data across the network.

In addition, the government argues that Enron's related software initiative,
known as the Broadband Operating System, or BOS, did not work as Enron
claimed. The initiative was intended in part to give outside software
developers access to the features of the Enron network.

Interviews with customers and others suggest that the functions were
available, although some in more rudimentary form than others. Indeed,
prosecutors' ability to prove the case, people involved in the investigation
say, will turn on subtle questions like whether a company can claim to offer
a function based on crude versions of software that may not be marketable on
a large scale. Technology efforts like Enron's broadband venture have
routinely begun with a grand vision to which initial commercial products too
often fail to measure up, particularly in their early releases.

Indeed, version numbers of commercial software have long been a running joke
among customers who have come to expect that bugs and shortcomings will not
be ironed out until the second or even third major release. For example, it
was not until Microsoft, the world's dominant maker of software, introduced
Windows 3.1 that many industry analysts and executives felt that it had a
competitive product, despite grand claims made nine years earlier when the
product was announced.

There is no doubt the government has obtained evidence showing that Enron's
broadband division was deeply troubled. In an e-mail message dated Dec. 20,
2000, Bill Collins, a former director of business development, lamented that
Enron's network software effort was fizzling, with no market share, no
purchasers and no one using it. "I don't care what lipstick and rouge you
paint that bitch up with," Mr. Collins wrote days before resigning from the
company. "She's still just dead meat lying on the sofa, just threatening to
stand up and steal the show."

But at the same time, programmers and engineers were sending e-mail messages
to their superiors - including several men now under indictment - boasting
about tests of the software functions now at the center of the charges.
Those included tests for clients ranging from Warner Brothers for its Drew
Carey Webcast to countrycool.com, which streamed the 1999 Country Music
Awards over Enron's network.

 "The results were successful," Kirk Wright, an Enron engineer, reported in
an e-mail to his bosses on Nov. 10, 1999, about a test of a project to
stream an episode of "The Drew Carey Show" over the network. He added, "All
of the streams worked and started within the acceptable time frame,"
signaling that Enron's broadband scheduling functions had performed
properly. The government indictment suggests that such functions did not
exist.

Moreover, data collected in the 1999 Webcast of the Country Music Awards
show that Enron was metering use of broadband by customers, at varying
levels of quality. These, also, are functions that the indictment suggests
did not exist.

Ultimately, many technical experts at Enron made public statements about the
technology that are virtually identical to comments cited in the
indictments, raising the possibility that there were true believers inside
the division. For example, in a Jan. 12, 2000, conference call with Lehman
Brothers analysts, David Berberian, managing director of the E.B.S.
technology group, described the system's abilities in ways prosecutors now
say are false. The network software "fundamentally controls how data is
routed from content providers to users, how quality of service is determined
appropriately by path, and how we channel the data down the right path," Mr.
Berberian said, according to a transcript of the call. Mr. Berberian did not
return phone messages.

Legal experts say that it is unusual for a situation in which people argue
over a product's functionality to result in criminal indictment. That is
largely because of the difficulty in proving that a decision based on
conflicting opinions was knowingly false.

 "If a decision was made that the broadband system worked, and that is based
on engineers and computer experts saying it worked, that should be enough,
period," said John J. Fahy, a former federal prosecutor in New Jersey.
"Indictments and criminal charges shouldn't be based on facts that are the
result of different people having different interpretations of whether
something works. That's just not fair."

The events that led to the recent charges involving broadband began with
Enron's purchase in 1997 of Portland General Electric, an Oregon utility.
The new subsidiary came with a start-up telecommunications business, which
Enron initially planned to shut down. But a successful fiber optic network
deal
known as the Western Build - in which Enron sold a small portion of the
lines involved at prices that paid for the entire project - persuaded
Jeffrey K. Skilling, then Enron's chief executive, to pursue the building of
a broadband business.

--

3. WorldCom Agrees to Pay $500 Million
Settlement With SEC Would Benefit Investors

By Brooke A. Masters and Christopher Stern
Washington Post Staff Writers
Tuesday, May 20, 2003; Page A01

NEW YORK, May 19 -- WorldCom Inc. agreed today to pay investors $500 million
to settle charges that the telecommunications company defrauded thousands by
claiming it was profitable during a three-year period when it was actually
losing money.

The proposed settlement between the nation's second-largest long-distance
company and the Securities and Exchange Commission is groundbreaking not
only because of its size -- it would be the largest payment ever by a
non-Wall Street firm -- but also because it takes advantage of a new law
aimed at steering settlement proceeds to investors harmed by corporate
fraud.

If U.S. District Judge Jed S. Rakoff approves the deal, it will mean that
WorldCom, which now does business as MCI, has cleared another major hurdle
in its effort to emerge from bankruptcy as early as October. Financial
analysts said WorldCom appears to have enough money to pay the $500 million
penalty without disrupting its existing business and consumer phone and
Internet operations.

On paper, the settlement actually proposes a $1.51 billion fine, but because
WorldCom is in bankruptcy, the final payout would be closer to $500 million.
Like other unsecured creditors in the bankruptcy process, the investors
would be paid 33.1 cents on the dollar.

At a hearing yesterday, Rakoff said he needed more time to study the complex
deal, including the proposal to distribute money to WorldCom's investors.
"The court needs to have complete information not only as to whom the
settlement will benefit but whom it will not, as well as the rationales for
such choices as have been made," Rakoff said.

The settlement would be the first test of the Sarbanes-Oxley legislation
passed last year that allows defrauded investors to benefit directly from
settlements and penalties. Congress approved the legislation in response to
a wave of corporate scandals that came to light last year, including the
massive accounting problems at WorldCom. WorldCom has said that its improper
accounting totals $9 billion from 1999 to early 2002, but sources say the
final amount may be closer to $11 billion.

One month after it initially disclosed the accounting problems, WorldCom
filed for bankruptcy. The company has since sought to transform itself by
bringing in new management. In December, WorldCom hired Michael D. Capellas,
a former Hewlett-Packard Co. president, to bring the company out of
bankruptcy. The company also moved its headquarters from Clinton, Miss., to
Ashburn in Northern Virginia, where it now has approximately 4,000
employees. Last month, WorldCom announced plans to change its name to MCI.
But the name change will not become official until the company exits the
bankruptcy process.

Rakoff previously approved a partial settlement with WorldCom that subjected
the company to federal scrutiny indefinitely. Rakoff made it clear today
that he also wanted more details about the fraud at the company before he
was willing to sign off on a final financial penalty.

"The present record affords an inadequate basis to evaluate, let alone
approve at this time, any settlement of a matter of such size, complexity
and importance," the judge said.

Rakoff said he "and the public need to know much more of the details of the
defendant's seemingly massive fraud" and what WorldCom has done to improve
its internal controls and corporate governance. WorldCom has neither
admitted nor denied wrongdoing under the settlement.

Michael H. Salsbury, WorldCom's executive vice president and general
counsel, said the settlement takes into account the company's efforts to
work with federal investigators since revealing the accounting fraud last
summer.

"This settlement recognizes our cooperation with the SEC's investigation,
the company's acceptance of responsibility for its past accounting
practices, and the significant strides we have made in rebuilding MCI as a
model of good corporate governance," said Salsbury in a statement released
today.

Peter H. Bresnan, the SEC's deputy chief litigation counsel, told Rakoff
that the punishment is warranted, given WorldCom's actions.

"WorldCom engaged in the largest financial fraud in history. As a
consequence, the largest civil penalty ever imposed is warranted," he said.
"The settlement is tough . . . [and] is the result of lengthy, hard-fought
negotiations with the company and the creditors committee."

All of the money will be distributed to WorldCom's victims, including
current and former shareholders and bondholders. The mechanics of the
distribution have not been worked out, SEC officials said.

Bresnan said the SEC's proposal that WorldCom's investors be treated like
the other creditors is "unprecedented," but he added "everything about this
case is unprecedented."

Financial analysts said the penalty is large enough to have a significant
impact on the company but not to permanently cripple it. "I think the SEC
probably fined them as much as they could without jeopardizing their
viability," said Patrick Comack, a telecommunications analyst with Guzman &
Co.

The company, which has not been paying interest on its $41 billion in debt
since filing for bankruptcy in July, now has more than $3 billion in cash.
It has said it expects to have $1 billion in cash after paying its remaining
debts when it emerges from bankruptcy. A source familiar with the company's
financial projections said the $500 million fine was factored into the
estimate of how much cash it would have on hand.

Some experts on corporate crime expressed surprise at the size of the
proposed penalty. "That's a lot of money," said Edward Soule, a professor of
business ethics at Georgetown University. He said the penalty appears to
send a strong message that the SEC will not tolerate fraud on corporate
financial statements.

"It's extraordinary. And it's not totally clear why a company with new
management emerging from a bankruptcy ought to be subject to that kind of
fine," said Jerry A. Isenberg, an SEC defense lawyer who formerly worked in
the agency's division of enforcement.

Nell Minow, editor of the Corporate Library, an independent research firm
that specializes in corporate governance, said the penalty may be high but
it is not nearly enough to compensate WorldCom investors who lost billions
of dollars during the years that the fraud took place. "It is a drop in a
very, very big bucket," Minow said. During the last three years, the value
of WorldCom's outstanding stock has dropped from over $100 billion to become
virtually worthless.

Both Soule and Minow noted that the penalty, while it is likely to take a
heavy toll on MCI, does not punish the individual executives who actually
committed the accounting fraud.

"A lot of people inside the company made a lot of money and I would like to
see them give it back," Minow said.

Four former WorldCom executives have already pleaded guilty to fraud charges
brought by the Justice Department. A fifth, former chief financial officer
Scott D. Sullivan, has pleaded not guilty and is preparing to go to trial.
WorldCom founder and former chief executive Bernard J. Ebbers has not been
charged, although he remains a subject of federal civil and criminal
investigations.

--

THE NEW YORK TIMES
May 11, 2003
'New Media': Ready for the Dustbin of History?
By STEVE LOHR
http://www.nytimes.com/2003/05/11/weekinreview/11LOHR.html?th

Last year, Barry Diller, once an old-fashioned movie mogul, sold off his
company's television and film properties and invested in Internet operations
that specialize in searching and selling. Today, his company, USA
Interactive, owns a major online travel service, a lodging site, a ticket
booking agency and a dating site. Last week, Mr. Diller agreed to pay $734
million for Lending Tree, a Web site for finding and arranging home loans.
Mr. Diller and others have come to realize that two things succeed
commercially on the World Wide Web: searching (like Google and Yahoo) and
shopping (like Amazon.com and eBay).

Is that what the digital revolution has come to? Back in the mid-1990's, it
was going to cause a media revolution. The shift to bits, the 1's and 0's of
computer code, would change everything, wrote Nicholas Negroponte, director
of the M. I. T. Media Laboratory, in his 1995 best seller, "Being Digital."
Book publishers, newspapers, magazines, television networks and movie
studios - all would be digitized, some would disappear, but vast new
opportunities would arise.

The shift to bits promised more than just faster and cheaper distribution of
the same old information and entertainment. The digital age held out the
potential for a genuinely "new media." Pundits and media executives spoke
about the prospect of everything from interactive television and shopping -
click the zapper to suggest a new story line or buy the sweater Jennifer
Aniston was wearing on that "Friends" episode - to donning goggles and suits
to enter virtual worlds offering simulated sports, travel and sex.

But it hasn't happened. The companies that spent hugely on the "digital
convergence" of media and Internet-era computing, AOL Time Warner and
Vivendi Universal, which bought Mr. Diller's media properties, are in
turmoil. And their visionary architects, Stephen M. Case at AOL Time Warner
and Jean-Marie Messier at Vivendi Universal, have been ousted.
"In the early days, in the 1990's, we thought that media was the big
application on the Web," said Michael Kinsley, who founded the online
magazine Slate in 1996. "But it turned out to be e-commerce."

Unlike so many online media start-ups, Slate, which is owned by Microsoft,
has managed to survive and, finally, break even as a business. It has some
distinctive online features, like reader forums and clips of movies it
reviews. But Mr. Kinsley, who retired as editor in chief last year, concedes
that Slate, while a widely respected magazine, has not yet developed into a
distinctively new medium. "The multimedia component is our biggest failure,
but it is a failure we share with everyone else," he said.

Perhaps this shouldn't be surprising. The Internet is a low-cost
communications technology. And a shopping site like Amazon.com is, in
essence, a big database lashed to the Internet. There is, to be sure, plenty
of marketing and technical innovation involved. But searching databases and
processing transactions - computers have been doing that for decades.
It's now obvious nobody yet knows how to create a successful, and truly new,
medium. The Microsoft experience is illuminating. In the late 1990's, Rupert
Murdoch, chairman of the News Corporation, said, "Everybody in the
communications business is paranoid of Microsoft, including me."
Microsoft invested in media properties with abandon in 1990's, including its
large stake in NBC, resulting in both the MSNBC cable network and its Web
site. In 1996, Wired magazine ran a cover story, "Microsoft Morphs Into a
Media Company."

But it didn't, and Microsoft is once again focused on software.
In fact, there is little natural affinity between software and media. A
National Research Council study to be published this week, "Beyond
Productivity: Information Technology, Innovation and Creativity," notes, "As
long as the tools required to produce computer-mediated work are programming
tools, the result will be programmer-created design."
"There is a great distance," the report states, "from the paintbrush or
piano to programming in C++."

In addition, most homes do not yet have high-speed, broadband connections to
the Internet that permit the delivery of movie-style video and high-quality
music.

But that is changing; 100,000 new households are signing up for such
services each week.

So the promised wonders of new media may yet arrive. In the meantime, the
Internet has changed daily life in ways most people could not have imagined
in 1994. People manage their lives and relationships via e-mail and instant
messaging, and second-graders are skilled Google searchers.

Indeed, the history of the wired world consists largely of the unimagined
and the unanticipated. Almost no one foresaw the Web's explosive growth,
just as few foresaw the dot-com bubble or the death of thousands of
start-ups when it burst. Yet as a recent cover story in Business Week, "The
E-Biz Surprise," noted, the projections of the growth in Internet commerce
made in the bubble days of 1999 have proved pretty accurate. E-commerce
between businesses in the United States will reach an estimated $2.4
trillion this year, according to Forrester Research, while e-commerce sales
to consumers are projected at $95 billion.

"The Internet is the big thing it was supposed to be, but not in the way we
thought it would," said Dan Bricklin, a co-inventor of the electronic
spreadsheet, which helped power the personal computer revolution. "It wasn't
by changing commerce - every company didn't become Amazon - but as a new
tool for commerce."

That kind of uncertainty is inherent in the technology, observed Tim
Berners-Lee, the creator of the World Wide Web. "It's a distributed system,"
he said. "You put tools out there and see what happens. You accept that
things are going to be messy and somewhat unpredictable."

--

5. http://www.redherring.com/mag/issue122/5945.html


Forget Moore's law because it is unhealthy. Because it has become our
obsession. Because high tech has become fixated on it at the expense of
everything else--especially business strategy. It is precisely this
fixation, at the cost of other considerations like profit, product, and
market, that led to the dot-com bubble and bust. Google is forgetting
Moore's law, says a statement by Eric Schmidt, CEO of Google. His words were
both simple and devastating: when asked how the 64-bit Itanium, the new
megaprocessor from Intel and Hewlett-Packard, would affect Google, Mr.
Schmidt replied that it wouldn't. Google had no intention of buying the
superchip. Rather, he said, the company intends to build its future servers
with smaller, cheaper processors.


--


6. Enron art auction takes in $1 million for creditors
May 16, 2003, 12:02AM, Associated Press

NEW YORK -- Bankrupt Enron Corp. raised nearly $1 million to pay creditors
during an art auction Thursday night of prized possessions such as Claes
Oldenburg's pop sculpture Soft Light Switches, which fetched $360,000.
A U.S. bankruptcy judge had authorized Phillips de Pury & Luxembourg, an
international art auction house, to conduct the sale.
The five-lot collection had been expected to bring between $720,000 and
$1.03 million, Enron spokeswoman Karen Denne said. It raised $952,000 for
Enron, including $135,000 for Jack Pierson's sculpture Stardust and $265,000
for Donald Judd's untitled minimalist sculpture of two boxes.
"We're very pleased," Denne said. "The goal in this process is to maximize
the value of these assets for our creditors, and this auction enabled us to
do that."
Enron creditors have filed 23,000 claims worth hundreds of billions of
dollars.
More Enron artwork is scheduled to be auctioned today. That sale is expected
to raise $190,000 to $270,000.
The collection was purchased by the company's in-house art committee, headed
by Lea Fastow, the wife of former Chief Financial Officer Andrew Fastow.

--

7. Turner, Case, Barksdale named in AOL fraud suit
 By Andrew Orlowski in San Francisco
Posted: 15/04/2003 at 19:18 GMT

AOL Time Warner inflated its revenues by $1.7 billion, a suit filed
yesterday
alleges.

It's one of a pair filed on behalf of shareholders, who also allege that
former leading executives including Steve Case, Ted Turner and Jim Barksdale
profited heavily from insider dealing.

The suit filed in California represents two investors: the University of
California and the Amalgamated Bank. It's a racy read, alleging that
executives profited by almost $1 billion on either side of the marriage
between AOL and Time Warner.

The figures are eye watering. Between July 2000 and November last year, Case
pocketed $156 million from the sale of AOL Time Warner stock, Barksdale $119
and Turner $339 million.

A second class action suit filed by the Minnesota State Board of Investments
is expected today.

Asked about declining online ad revenues in Fall 2000, the company's
then-COO Bob Pittman replied "for this company, I don't see it, and I don't
buy it. We are benefiting from the current advertising trends of
consolidation in the Internet space. It is actually good for us."

The California suit and a rich history of links can be found at GMSV, which
saw the significance of this story early.

--

8. <http://www.guardian.co.uk/business/story/0,3604,920409,00.html>

   Anniversaries that Wall Street would prefer to waltz away from
   David Teather in San Jose
   Monday March 24, 2003
   The Guardian

   Wall Street will mark two chastening anniversaries today. On March 24
   three years ago, benchmark indexes Standard & Poor's 500 and the
   Nasdaq 100 hit their peaks, bloated by Silicon Valley hype. Then the
   long slide began.

   The bare statistics for the ensuing losses are staggering. The
   broad-based S&P 500 has lost around 49% of its value from its peak of
   1,527.46 on March 24 2000, hitting a low of 776.76 on October 9. It is
   the worst bear market since the years before the second world war,
   when the S&P 500 index fell 60%.

   If it manages to plumb new lows from here, the S&P bear market will
   beat the 33-month downturn of 1929-32.

   The falls in the Nasdaq, the market closely linked to technology
   stocks, have been even more pronounced. The Nasdaq composite reached
   its highs on March 10 2000, and subsequently fell by 78%. The QQQ -
   which tracks the Nasdaq 100 index - dropped even further, by 83%.

   But it is behind the statistics that the real story has emerged over
   the past 18 months of just how unreal that peak in 2000 afterwards
   proved.

   Wall Street is paying dearly for the indulgence of the late 1990s. The
   investment banks have agreed to a $1.4bn settlement of claims that
   their analysts issued overly optimistic research to investors in the
   hope of currying favour with the firms they covered. The
   self-enrichment of the banks and their clients has also been exposed
   as they handed out shares in hot initial public offerings to favoured
   executives.

   Groups including WorldCom, Global Crossing and Enron collapsed as it
   emerged that they were little more than the fabrications of clever
   accountants. More unnervingly, blue chip firms including Xerox, Tyco
   and AOL Time Warner have been found to have pursued "aggressive"
   accounting to meet the unreachable forecasts of the dotcom boom.

   Many of those most closely associated with the peaks - Salomon Smith
   Barney analyst Jack Grubman, AOL boss Steve Case, Vivendi Universal's
   Jean-Marie Messier, Merrill Lynch's Henry Blodget, WorldCom's Bernie
   Ebbers, Bertelsmann's Thomas Middelhoff - are candidates for "where
   are they now?" shows - and the fallout continues. Dick Brown, who rode
   Cable & Wireless through the hype to a richly rewarded job at computer
   services giant EDS, was ousted last week.

   The late 1990s' get rich quick ideal attracted many first time retail
   investors into the markets who are now understandably wary of
   returning. Consumer confidence is at a nine-year low, according to
   some reports, and closing the accounting loopholes firms have
   exploited will depress corporate earnings this year.

   Ironically the internet companies that survived are again some of the
   best performers on the market, including Yahoo!, Ebay and Amazon.

   There has been some sign of life in the last week. The Dow Jones index
   posted its eighth day of gains on Friday and its best week since
   October 1982, gaining 13% since the recent rally began. The S&P 500
   has also seen eight days of gains, its longest run since June 1987.
   During the week, the Dow gained 8.4%, the S&P 7.5% and the Nasdaq
   composite 6.1%. For now, investors are focusing on a villain in
   Baghdad instead of any closer to home.

--

10. The New York Times
http://www.nytimes.com/2003/03/16/fashion/16TED.html

Dot-Com Saviors, Tilting at the World's Ills
March 16, 2003 By KATIE HAFNER

MONTEREY, Calif. WITH their sights set across the globe, they are heading
out from Silicon Valley with unflinching optimism, buoyant self-confidence
and, now that much of their industry has evaporated, a great deal of time on
their hands.

In increasing numbers, high-tech entrepreneurs who grew wealthy during the
dot-com boom of the late 1990's - as well as many who didn't - are turning
the intense business acumen they once devoted to making money to working for
what they see as the global good.

With the best of intentions, and maybe a hint of hubris, these New Age
saviors are trying to build water purifiers, manual irrigation pumps,
low-cost solar collectors, hearing aids, even highly durable mosquito nets.
Armed with Po Bronson's recent best-selling book, "What Should I Do With My
Life?" they hope to save lives while also giving greater meaning to their
own.

"Many people in this industry are in a Po Bronson moment," said Tom Rielly,
the founder of PlanetOut, an Internet site catering to gays and lesbians. "A
lot of dot-comers who are out of work are trying to figure out what to do,
and a lot of them are trying to make a difference."

This new mood was especially evident at last month's TED conference (for
Technology Entertainment and Design), an annual gathering in Monterey that
attracts many of the computer industry's elite. But instead of celebrating
technology's intrinsic beauty and financial potential, participants showed
off gizmos meant to improve living conditions in the third world.

Instead of jargon like personal bandwidth, killer app, and clicks and
mortar, the notions floating around this year were sustainability, the
ecology of terror and H.I.V. One of the most popular presentations came from
Dean Kamen, the inventor best known for the Segway Human Transporter, the
high-tech scooter that has yet to prove itself in the marketplace. At TED,
Mr. Kamen, 51, showed a water purifier that also generates electricity. The
device, which resembles a Good Humor ice cream cart, takes filthy water (all
that is available to much of Africa, he said) and distills it to crystalline
purity.

"Here you take the box and put it directly where someone needs it," Mr.
Kamen said. His device is still not ready for mass production, yet his plans
are grandiose. He said he would leave in the next few weeks for Africa to
explore distribution for his invention.

TED was not the only place where world betterment eclipsed return on
investment as a discussion point. Three weeks earlier, at the World Economic
Forum in Davos, Switzerland, the annual meeting of world economic and
political leaders, a dinner for high-tech executives focused almost
exclusively on problems of poverty and disease around the world. Bill Gates,
the Microsoft chairman, sat on a panel whose theme was "Science for the
Global Good," and discussed his foundation's work in bringing immunization
programs to developing countries.

While plenty of people in Silicon Valley are still focused on keeping their
businesses going, this change in direction among some of the technology
elite comes in the aftermath of the dot-com collapse and the Sept. 11
attacks. Fear of terrorism and war, and general nervousness about the health
of the planet, seem to have inspired a shift in priorities. Many of the
speakers at the conference were self-appointed Cassandras, describing the
dangers of American self-absorption with a fervor once reserved for initial
public offerings.

"Five years ago, people were too busy getting rich and being dazzled by
technology to think more broadly," said Chris Anderson, whose Sapling
Foundation, which finances medical, technological and educational projects
in the developing world, bought the rights to stage the TED conference from
its originator, Richard Saul Wurman, a gregarious designer and architect.

This year marked the 13th TED. Attendees pay $4,000 for three and a half
days of intellectual soul searching, mixed with some pure entertainment,
like a juggling act, and a generous dose of technological bravado.

The $1 million in profits made at this year's conference will be given to
causes devoted to clean water, ocean conservation and public health in the
developing world, Mr. Anderson said.

In many ways, this newfound idealism is connected to the old entrepreneurial
spirit.

"As silly as it seems now," said Kevin Jones, 52, who owned several
successful high-tech businesses before selling them, "there was an element
in the dot-com thing people believed in." That is, entrepreneurs of the 90's
embraced the virtues of a supposed New Economy with evangelistic fervor.

"People felt they were transforming something," Mr. Jones said. "And once
you whet someone's appetite like that, they're not willing to go back to
business as usual."

Besides, Mr. Jones added, only partly in jest, "the premium for selling your
soul has gone down."

Of course, the time happens to be ripe for a Po Bronson moment. Had the
dot-com bubble never burst, a lot of people might not have thought to turn
their attention to bettering the world.

Some of the dot-com activists consider what they are doing enlightened
self-interest, perhaps even enlightened opportunism. During the boom years,
Bill Gross's Idealab, an incubator for Internet-based startups, was churning
out online enterprises that offered toys, Web searches and wedding planning.
Then the bubble burst, and many of Idealab's companies disappeared. Mr.
Gross's personal wealth, $1 billion or more before the collapse, is now
roughly $200 million.

"Maybe since Sept. 11 and maybe because I'm almost 45 and maybe because I
have four wonderful happy kids, I want to do things that are important for
the world," Mr. Gross said.

He used his time onstage at TED to introduce one new Idealab venture, called
Energy Innovations, which is making inexpensive solar collectors to sell in
places needing cost-effective power. But he hasn't lost his capitalist zeal,
either. Eventually, Mr. Gross said, he hopes to turn Energy Innovations into
a money-making business.

Like others at the conference, Mr. Gross criticized the United States for
consuming the bulk of the planet's natural resources without regard for the
hostility such a lifestyle can engender. "The root causes of any hatred
against the U.S. have to be dealt with, as opposed to just closing our eyes
to it," he said.

Not surprisingly, perhaps, few of the newly socially aware entrepreneurs
speak of teaming up with public agencies like the World Bank and Unicef, or
even nongovernmental aid organizations like Oxfam. Instead, they focus on
groups like the Acumen Fund, a social venture fund that encourages an
entrepreneurial approach to fixing world problems. The Acumen Fund is
receiving $427,000 of the TED profits.

Jacqueline Novogratz, 41, a graduate of Stanford Business School who started
the Acumen Fund in 2001, said she emphasizes models that take an
investment-oriented approach to global betterment, treating social ventures
like any other entrepreneurial enterprise. So far the fund has raised $15
million.

As an example, Ms. Novogratz cited the Affordable Hearing Aid Project, which
has received $400,000 from the Acumen Fund and others to manufacture and
sell a $42 hearing aid in India. A comparable device would sell for $1,500,
Ms. Novogratz said.

Though given as a grant, she said, the money is structured like an
investment in a startup, with milestones and benchmarks to track progress.
Acumen Fund investors do not expect a financial return. "But millions of
people are getting access to a technology they wouldn't otherwise have," Ms.
Novogratz said, "and for many, that social return is as compelling as a
financial return."

The view from traditional philanthropists is surprisingly positive. Dr.
Richard Rockefeller, a physician and longtime philanthropist (he is the son
of David Rockefeller), said he admired the pluck of people like Mr. Gross,
even envied their experience.

"I've often thought, `Wouldn't it be nice just to go be an entrepreneur,' or
to do that first and get a grip," he said. Dr. Rockefeller, the chairman of
the United States advisory board of the international aid group Doctors
Without Borders, said he had encouraged his own two children "to go get a
skill and do it before they go out and change the world."

And rather than view the new batch of engaged social activists cynically,
Dr. Rockefeller gives them the benefit of the doubt. "It's very nuanced," he
said. "Some people don't know what to do with themselves. Others have gotten
a vision and want to act on it. They're getting a life."

Not all the good works come from those who have abandoned the high-tech
world. Some come from those who are still in it.

The latest version of the MoneyMaker, a decidedly low-tech leg-powered
irrigation pump, was created by a company called ApproTEC, a nonprofit
organization that develops and markets new technologies in Africa. It was
designed in part by volunteers at Ideo, an industrial design firm in Palo
Alto known for the sleek Palm V organizer and the Crest Neat Squeeze
toothpaste tube.

Since the first MoneyMaker pump was introduced in Kenya in 1996, it has
increased the average annual income among farmers there who use it from $120
a year to $1,400, according to Martin Fisher, a co-founder of ApproTEC.

Ideo helped design the newest pump, a deep-well version that went on the
market in Kenya last month, at no charge to ApproTEC. Some 40 Ideo employees
volunteered in the evenings and on weekends for nearly a year.

"The pump is real, and helping real people," said Ben Tarbell, the
28-year-old Ideo project manager who oversaw the pump's design.

Not everyone is embracing high-tech solutions like Mr. Kamen's water
purifier, or even more rudimentary technology like the ApproTEC pump. John
Wood, 39, quit his high-paying management job at Microsoft around the time
the Nasdaq market peaked in March 2000, and started Room to Read, a
nonprofit group that brings books, libraries and schools to poor Asian
countries.

Since its start, the group has built 33 schools and 400 school libraries,
delivered more than 200,000 books and financed 122 scholarships.

"For the price an American pays for an S.U.V. or a new Lexus, we could build
six schools in Nepal," Mr. Wood said, sounding a bit like a commercial for
Save the Children. "For the amount that a wealthy banker spends on a pair of
shoes, we could take a girl out of the orphanage, put her in a school
uniform, give her a book bag and some pens, and send her off to school."

But will the commitment last? What will happen if disillusionment sets in at
the slow pace of social change? Or if the next technology boom arrives?

One speaker at the TED conference elicited an appreciative laugh from the
audience when he told of a bumper sticker he had spotted recently in Silicon
Valley. It read, "Please God - Just One More Bubble."

Mr. Wood, for one, said he had no plans to abandon his project no matter
what happens in the high-tech business world. "I plan to sit out the next
bubble," he said. "I don't care if the Nasdaq goes to 20,000. I'll be in
Nepal delivering books to villages on the back of a yak."


--

11. Higher Profits, Lower Taxes
It's not just Enron that's been dodging corporate income taxes. The rest of
the Fortune 500 has been duping the IRS, too.
By Daniel Gross
Posted  Friday, February 14, 2003, at 1:15 PM PT

The latest Enron outrage appeared in yesterday's three-volume, 2,700-page
congressional report on the corrupt energy trading company. Congress found
that while Enron reported billions of dollars of profits to shareholders in
the years before it imploded, it paid no federal income taxes between 1996
and 1999 and just $63 million in 2000 and 2001.

Enron was certainly an outlier in tax avoidance, but it reflects a broader
trend. For all big businesses whine about high federal corporate income
taxes, they don't pay very much of them.

Back in 1977, according to a paper by Harvard Business School's Mihir Desai,
the corporate income tax provided nearly 20 percent of the government's
on-budget revenues (i.e., excluding taxes paid into the so-called Social
Security trust fund). But in 2001, it accounted for just 10.2 percent of
on-budget revenues. If you calculate corporate income taxes as a percentage
of all federal revenues-including Social Security taxes-corporations
contribute even less to the national fisc. In 1997, corporate income taxes
provided about 12 percent of total revenues-$188.67 billion out of $1.578
trillion. But that contribution fell to 10.1 percent in 1999 and to 8
percent in fiscal 2002, when corporations paid just $148 billion in income
taxes. In other words, between 1997 and 2002, corporate income taxes fell 21
percent in real terms, and their contribution to overall revenues fell 33
percent. (The data is drawn from the highly useful Treasury Monthly
Statement.) (Corporations also contribute to the national balane sheet by
paying a portion of payroll taxes.)

Of course, tax receipts should decline if corporate profits fall, as they
have in recent years. But as Desai notes, "The recent decline, beginning in
1996, is puzzling given the coincident economic expansion."

The culprit turns out to be a growing divergence, beginning in the mid-'90s,
between book income (the profits companies report to shareholders) and tax
income (the profits they report to the Internal Revenue Service). In 1993,
at firms with more than $250 million in assets-which pay the overwhelming
majority of corporate income taxes-the two figures were rather close. Such
companies claimed $1.12 in book income for every dollar in tax income. But
Desai shows that the ratio rose in each of the following five years so that
by 1998 large companies were reporting $1.63 in book income for each dollar
of tax income. That year, in fact, tax income fell 10.8 percent while book
income rose 0.8 percent. In dollar terms, the gap between the two figures
rose from $37 billion in 1993 to $172 billion in 1996 to $247 billion in
1998.

Why would book income and tax income differ at all? Well, wrinkles in the
tax code allow corporations to count depreciation and foreign source income
differently in the two measures. Another culprit is options. Companies
deduct from their taxable income the difference between the strike price of
an option and the market price of the stock at the time of exercise but
don't necessarily deduct it from the book income they report to
shareholders. So in the late '90s, when insiders cashed out big-time, the
rampant options exercise lowered taxable income. According to Desai, from
1996 to 2000, the proceeds from option exercises in the largest companies
amounted to more than one-quarter of operating cash flow. These actions
didn't necessarily drain tax revenues from the government. For when
individuals exercised options, they owed personal income taxes on the gains
they realized. However, if executives then move to shelter hundreds of
millions of dollars of this option income from t
 axes, as Sprint Chairman WilliamEsrey is reported to have done, it's
another story.

But that's not the whole story. According to Desai, in 1998, "more than half
of the difference between tax and book income-approximately $154.4 billion
or 33.7 percent of tax income-cannot be accounted for by these factors." He
concludes that the increasing use of tax shelters by large companies in the
late '90s could explain much of this gap.

Indeed, a chart in yesterday's New York Times suggests that, while most
large firms aren't avoiding taxes to the obscene degree Enron did, they're
certainly taking evasive action. In 1999, companies with $250 million in
assets or more had a real tax rate of 20.3 percent-sharply lower than the 35
percent statutory rate. Smaller companies, those with between $25 million
and $100 million in assets, paid federal income taxes at about a 36 percent
rate.

What do these numbers show? It could be that the government is not so greedy
when it comes to large corporations. More likely is that the sort of tax
avoidance that Enron elevated to an art has become part of the package of
tools that companies use to manage their earnings. And the bigger you are,
the more likely you are to evade aggressively-hiring accounting firms,
lobbyists, and lawyers; setting up subsidiaries in the Cayman Islands; etc.

Congress may have enough resources to investigate one Enron that is slyly
ducking its income taxes, but it certainly doesn't have enough to
investigate a whole Fortune 500 that is doing the same. Daniel Gross
(www.danielgross.net) writes Slate's "Moneybox" column. You can e-mail him
at moneybox {AT} slate.com. More to make you incensed about Enron.

--

12. http://squawk.ca/lbo-talk/current/2758.html

Economic headlines

Consumer Confidence in U.S. Declines to a Nine-Year Low Amid Job Concerns -
Bloomberg (1/28/2003 3:26 PM)

Goldman's Paulson Sees Dim Outlook for 2003 Recovery, May Cut More Jobs -
Bloomberg (1/28/2003 3:26 PM)

U.S. pension agency loses $8 billion - MSNBC (1/28/2003 8:47 AM)

U.S. State Deficits Top $100 Bln, Legislators Say - Bloomberg (1/28/2003
6:34 AM)

As retailers close, available space grows - Dallas MN (1/29/2003 5:53 AM)

U.S. Deficit Could Top $300 Billion - NY Times (1/29/2003 6:16 AM)

World jobless hits record high - BBC (1/28/2003 8:47 AM)

Trade deficit sets record - USAToday (1/29/2003 6:22 AM)

Funding woes threaten passenger train service in Missouri - KC Star
(1/28/2003 8:27 AM)

Nevada jobless rate rises - Las Vegas RJ (1/28/2003 8:28 AM)

Student debt load triples over decade - Houston Chronicle (1/28/2003 10:14
AM)

Shares plunge on war jitters - BBC (1/29/2003 6:05 AM)

First equity outflow in 14 years - Detroit FP (1/28/2003 8:17 AM)

Davos economists predict falling dollar - FT ($) (1/27/2003 8:23 PM)

End of the cult of equities - Coggan, FT ($) (1/27/2003 8:19 PM)

Soros warns against weak US$ - BusinessTimes (1/28/2003 7:00 AM)

Tension over pensions - CBSMW (1/28/2003 6:54 AM)

VENTURE CAPITAL: Investment pace slowest since 1st quarter of 1998. - Chi.
Trib (1/28/2003 6:21 AM)

Office vacancies skyrocket - Rocky MN (1/29/2003 5:56 AM)

Venture Capital Investment Rolls Back - AP (1/28/2003 6:40 AM)

Top bankers wary of quarterly reports - FT (1/27/2003 8:18 PM)

Credit-rating agencies under SEC microscope - Houston Chronicle (1/28/2003
10:18 AM)

Home heating oil prices rise as ice slows delivery - USAT (1/28/2003 7:06
AM)

Too many bottles, not enough buyers - ST (1/28/2003 8:37 AM)

SBC offers gloomy forecast - Dallas MN (1/29/2003 5:55 AM)

Domestic unknown haunts UPS - FT (1/28/2003 10:14 PM)

SEC Watching Some Credit - Rating Agencies - AP (1/28/2003 6:43 AM)

Retailers Plod Through Dismal January - Reuters (1/27/2003 8:02 PM)

Rough chapter for the book business - CNBC (1/28/2003 6:56 AM)

I2 facing informal SEC inquiry - Dallas MN (1/28/2003 6:27 AM)

Mirro expects to shut ground breaking plant - Milwaukee JS (1/28/2003 8:18
AM)

Bank of America and J.P. Morgan Retreat From Businesses in South America -
Bloomberg (1/29/2003 6:09 AM)

Japan's Industrial Production Unexpectedly Falls; Companies Move Overseas -
Bloomberg (1/29/2003 6:10 AM)

Japanese Bond Yield Falls to Within 1 Basis Point of Record Low - Bloomberg
(1/28/2003 6:45 AM)

Japan's Retail Sales Fall a Greater-Than-Expected 3.9 Percent in December -
Bloomberg (1/27/2003 8:01 PM)

Germany's Clement Cuts Economic Growth Forecast for This Year to 1 Percent -
Bloomberg (1/29/2003 6:07 AM)

--

New Economy Wistfully Recalled As Tiny Dot-Com Promotional Object Found In
Drawer

The Onion, 22  January, 2003
http://www.theonion.com/onion3902/new_economy.html

SAN FRANCISCO< The "New Economy" predicted to make "bricks and mortar"
retailers obsolete recalled Monday, when a small dot-com promotional item
was discovered in the
junk drawer of former dot-commer Eric Noyce.

Noyce, 28, an associate vice-president of business development for Pets.com
from August 1998 to December 2000, came across a small gadget emblazoned
with "antHead.com" while searching for a corkscrew to open a $3 bottle of
wine.

"Holy shit, check this out," said the minimum-wage-earning Noyce as he
examined the slick-looking promotional doohickey. "antHead.com. I think I
remember getting this. It was in a goodie bag I got at some launch party.
antHead, antHead... What did they do again?"

According to roommate Bryan Bollinger, a former Flooz.com tech-support
supervisor and current delivery driver for Angelo's Pizza, Noyce became
sentimental and introspective while gazing at the useless but expensively
manufactured trinket.

"He had this far-away look in his eyes, like he'd been transported back to a
more innocent, simpler time," Bollinger said. "I guess we can all relate to
that feeling."

Bollinger, who has bounced between unemployment and under-employment for two
and a half years, then returned to watching TV as Noyce continued to wax
nostalgic.

"Wait a minute," Noyce said. "I remember this antHead thingy having some
sort of button that would light up different colors every time you squeezed
it. Shit, how much do you think something like this would cost to make?
Those guys must have spent a fortune on these. It doesn't really do
anything, but I remember pulling it out of my launch-party gift bag,
thinking it was kind of cool. Sort of."

Noyce then tried to squeeze the object to see if it would still light up. It
did not.

Like thousands of other dot-com promotional doodads produced from the
mid-'90s until the New Economy bubble burst in the winter of 2000-01, the
object was created as a means of "raising awareness and generating
excitement about the brand." Handed out by the thousands at antHead.com's
extravagant launch party in July 1999, it soon found its way into Noyce's
bedroom junk drawer, along with numerous other equally functionless
giveaways from the time, including a FilmZone.com miniature director's
chair, a Boo.com yo-yo, and a Kozmo.com glow-in-the-dark floppy flyer.
"Wait, I got it!" said Noyce, snapping out of his silence. "antHead! They
had this huge pre-launch ad campaign in alternative weeklies across the
country, with those mysterious 'teaser' ads that showed the ant-face logo
with just the words 'antHead Is Coming.' When they finally launched, the
party was held in five cities simultaneously, each one simulcast to the
others via live satellite feed on huge video-projection screens. I'm pretty
sure Douglas Coupland was the celebrity host."

Added Noyce: "I think the antHead site offered either original
Shockwave-animated programming, live music webcasts, or both. Or neither."
Though neither Noyce nor anyone else in the U.S. can remember, antHead.com
went public in August 1999, making its debut on NASDAQ at $17 a share. By
April 2000, the stock had risen to a whopping $114 per share, with a market
cap of $81 billion.

As part of their compensation packages, Noyce and his fellow dot-com
employees were often issued stock options, which have come to be known in
the financial world as "pretend Internet money." This pretend money, now
estimated to be of slightly less value than the multi-colored paper bills
used in Monopoly, was considered extremely valuable at the time. A great
deal of this imaginary wealth was actually used to purchase Time Warner, one
of the largest media conglomerates in the world.

"I remember the food at the antHead launch was great," Noyce said. "They had
ceviche and grilled shrimp on skewers and these really great mini-fajita
hors d'oeuvres. I just wish I could remember more about the company."
According to financial analysts, for many people Noyce's age, the New
Economy boom was a mythic, idyllic time in American history.

"Prosperity seemed to hang from tree boughs like ripe fruit," said Forbes
senior writer Peter Kafka, author of What The F {AT} %* Happened?!?: The New
Economy money could have bought, like a washing machine so he wouldn't have
to haul
his laundry all the way down to the basement of his rathole apartment
complex every time he needed to wash his Arby's uniform."

--

14. http://biz.yahoo.com/rc/030116/media_tmpworldwide_1.html
NEW YORK, Jan 16 (Reuters) - Online job search company Monster.com, which
has some 20 million resumes in its database, needs to do some fact-checking
on of its own resumes, BusinessWeek reported.
The Web site of Monster.com's parent company, TMP Worldwide Inc. lists
Chairman Jeff Taylor as having an "executive MBA/OPM" from Harvard Business
School, but the school does not have such a degree, BusinessWeek said in its
Jan. 27 issue.

--

15.


---------------------------------------------------------------------------
                     Copyright 2003 CommonDreams.org
---------------------------------------------------------------------------
                   www.commondreams.org/views03/0101-07.htm

 Published on Wednesday, January 1, 2003

         Now Corporations Claim The "Right To Lie"
         by Thom Hartmann

  While Nike was conducting a huge and expensive PR blitz to tell people
 that it had cleaned up its subcontractors' sweatshop labor practices, an
 alert consumer advocate and activist in California named Marc Kasky
 caught them in what he alleges are a number of specific deceptions.
 Citing a California law that forbids corporations from intentionally
 deceiving people in their commercial statements, Kasky sued the
 multi-billion-dollar corporation.

 Instead of refuting Kasky's charge by proving in court that they didn't
 lie, however, Nike instead chose to argue that corporations should enjoy
 the same "free speech" right to deceive that individual human citizens
 have in their personal lives. If people have the constitutionally
 protected right to say, "The check is in the mail," or, "That looks great
 on you," then, Nike's reasoning goes, a corporation should have the same
 right to say whatever they want in their corporate PR campaigns.

 They took this argument all the way to the California Supreme Court,
 where they lost. The next stop may be the U.S. Supreme Court in early
 January, and the battle lines are already forming.

 For example, in a column in the New York Times supporting Nike's
 position, Bob Herbert wrote, "In a real democracy, even the people you
 disagree with get to have their say."

 True enough. But Nike isn't a person - it's a corporation. And it's not
 their "say" they're asking for: it's the right to deceive people.

 Corporations are created by humans to further the goal of making money.
 As Buckminster Fuller said in his brilliant essay The Grunch of Giants,
 "Corporations are neither physical nor metaphysical phenomena. They are
 socioeconomic ploys - legally enacted game-playing..." Corporations are
 non-living, non-breathing, legal fictions. They feel no pain. They don't
 need clean water to drink, fresh air to breathe, or healthy food to
 consume. They can live forever. They can't be put in prison. They can
 change their identity or appearance in a day, change their citizenship in
 an hour, rip off parts of themselves and create entirely new entities.
 Some have compared corporations with robots, in that they are human
 creations that can outlive individual humans, performing their assigned
 tasks forever.

 Isaac Asimov, when considering a world where robots had become as
 functional, intelligent, and more powerful than their human creators,
 posited three fundamental laws that would determine the behavior of such
 potentially dangerous human-made creations. His Three Laws of Robotics
 stipulated that non-living human creations must obey humans yet never
 behave in a way that would harm humans.

 Asimov's thinking wasn't altogether original: Thomas Jefferson and James
 Madison beat him to it by about 200 years.

 Jefferson and Madison proposed an 11th Amendment to the Constitution that
 would "ban monopolies in commerce," making it illegal for corporations to
 own other corporations, banning them from giving money to politicians or
 trying to influence elections in any way, restricting corporations to a
 single business purpose, limiting the lifetime of a corporation to
 something roughly similar to that of productive humans (20 to 40 years back
 then), and requiring that the first purpose for which all corporations were
 created be "to serve the public good. The amendment didn't pass because
 many argued it was unnecessary: Virtually all states already had such laws
 on the books from the founding of this nation until the Age of the Robber
 Barons.

 Wisconsin, for example, had a law that stated: "No corporation doing
 business in this state shall pay or contribute, or offer consent or agree
 to pay or contribute, directly or indirectly, any money, property, free
 service of its officers or employees or thing of value to any political
 party, organization, committee or individual for any political purpose
 whatsoever, or for the purpose of influencing legislation of any kind, or
 to promote or defeat the candidacy of any person for nomination,
 appointment or election to any political office." The penalty for any
 corporate official violating that law and getting cozy with politicians
 on behalf of a corporation was five years in prison and a substantial
 fine.

 Like Asimov's Three Laws of Robotics, these laws prevented corporations
 from harming humans, while still allowing people to create their robots
 (corporations) and use them to make money. Everybody won. Prior to 1886,
 corporations were referred to in US law as "artificial persons," similar
 to the way Star Trek portrays the human-looking robot named Data.

 But after the Civil War, things began to change. In the last year of the
 war, on November 21, 1864, President Abraham Lincoln looked back on the
 growing power of the war-enriched corporations, and wrote the following
 thoughtful letter to his friend Colonel William F. Elkins:

 "We may congratulate ourselves that this cruel war is nearing its end. It
 has cost a vast amount of treasure and blood. The best blood of the
 flower of American youth has been freely offered upon our country's altar
 that the nation might live. It has indeed been a trying hour for the
 Republic; but I see in the near future a crisis approaching that unnerves
 me and causes me to tremble for the safety of my country.

 "As a result of the war, corporations have been enthroned and an era of
 corruption in high places will follow, and the money power of the country
 will endeavor to prolong its reign by working upon the prejudices of the
 people until all wealth is aggregated in a few hands and the Republic is
 destroyed. I feel at this moment more anxiety than ever before, even in
 the midst of war. God grant that my suspicions may prove groundless."

 Lincoln's suspicions were prescient. In the 1886 Santa Clara County vs.
 Southern Pacific Railroad case, the U.S. Supreme Court ruled that the
 state tax assessor, not the county assessor, had the right to determine
 the taxable value of fenceposts along the railroad's right-of-way.
 However, in writing up the case's headnote - a commentary that has no
 precedential status - the Court's reporter, a former railroad president
 named J.C. Bancroft Davis, opened the headnote with the sentence: "The
 defendant Corporations are persons within the intent of the clause in
 section 1 of the Fourteen Amendment to the Constitution of the United
 States, which forbids a State to deny to any person within its
 jurisdiction the equal protection of the laws."

 Oddly, the court had ruled no such thing. As a handwritten note from
 Chief Justice Waite to reporter Davis that now is held in the National
 Archives said: "we avoided meeting the Constitutional question in the
 decision." And nowhere in the decision itself does the Court say
 corporations are persons.

 Nonetheless, corporate attorneys picked up the language of Davis's
 headnote and began to quote it like a mantra. Soon the Supreme Court
 itself, in a stunning display of either laziness (not reading the actual
 case) or deception (rewriting the Constitution without issuing an opinion
 or having open debate on the issue), was quoting Davis's headnote in
 subsequent cases.

 While Davis's Santa Clara headnote didn't have the force of law, once the
 Court quoted it as the basis for later decisions its new doctrine of
 corporate personhood became the law.

 Prior to 1886, the Bill of Rights and the 14th Amendment defined human
 rights, and individuals - representing themselves and their own opinions -
 were free to say and do what they wanted. Corporations, being artificial
 creations of the states, didn't have rights, but instead had privileges.

 The state in which a corporation was incorporated determined those
 privileges and how they could be used. And the same, of course, was true
 for other forms of "legally enacted game playing" such as unions,
 churches, unincorporated businesses, partnerships, and even governments,
 all of which have only privileges.

 But with the stroke of his pen, Court Reporter Davis moved corporations
 out of that "privileges" category - leaving behind all the others
 (unions, governments, and small unincorporated businesses still don't
 have "rights") - and moved them into the "rights" category with humans,
 citing the 14th Amendment which was passed at the end of the Civil War to
 grant the human right of equal protection under the law to newly-freed
 slaves.

 On December 3, 1888, President Grover Cleveland delivered his annual
 address to Congress. Apparently the President had taken notice of the
 Santa Clara County Supreme Court headnote, its politics, and its
 consequences, for he said in his speech to the nation, delivered before a
 joint session of Congress: "As we view the achievements of aggregated
 capital, we discover the existence of trusts, combinations, and
 monopolies, while the citizen is struggling far in the rear or is trampled
 to death beneath an iron heel. Corporations, which should be the
 carefully restrained creatures of the law and the servants of the people,
 are fast becoming the people's masters."

 Which brings us to today.

 In the next few weeks the U.S. Supreme Court will decide whether or not
 to hear Nike's appeal of the California Supreme Court's decision that
 Nike was engaging in commercial speech which the state can regulate under
 truth in advertising and other laws. And lawyers for Nike are preparing
 to claim before the Supreme Court that, as a "person," this multinational
 corporation has a constitutional free-speech right to deceive.

 The U.S. Chamber of Commerce, Exxon/Mobil, Monsanto, Microsoft, Pfizer,
 and Bank of America have already filed amicus briefs supporting Nike.
 Additionally, virtually all of the nation's largest corporate-owned
 newspapers have recently editorialized in favor of Nike and given
 virtually no coverage or even printed letters to the editor asserting the
 humans' side of the case.

 On the side of "only humans have human rights" is the lone human activist
 in California - Marc Kasky - who brought the original complaint against
 Nike. People of all political persuasions who are concerned about
 democracy and human rights are encouraging other humans to contact the
 ACLU (125 Broad Street, 18th Floor, New York, NY 10004) and ask them to
 join Kasky in asserting that only living, breathing humans have human
 rights. Organizations like ReclaimDemocracy.org are documenting the case
 in detail on the web with a sign-on letter, in an effort to bring the
 ACLU and other groups in on behalf of Kasky.

 Corporate America is rising up, and, unlike you and me, when large
 corporations "speak" they can use a billion-dollar bullhorn. At this
 moment, the only thing standing between their complete takeover of public
 opinion or their being brought back under the rule of law is the U.S.
 Supreme Court.

 And, interestingly, the Chief Justice of the current Court may side with
 humans, proving this is an issue that is neither conservative or
 progressive, but rather one that has to do with democracy versus
 corporate plutocracy.

 In the 1978 Boston v. Bellotti decision, the Court agreed, by a one vote
 majority, that corporations were "persons" and thus entitled to the free
 speech right to give huge quantities of money to political causes. Chief
 Justice Rehnquist, believing this to be an error, argued that corporations
 should be restrained from political activity and wrote the dissent.

 He started out his dissent by pointing to the 1886 Santa Clara headnote
 and implicitly criticizing its interpretation over the years, saying,
 "This Court decided at an early date, with neither argument nor
 discussion, that a business corporation is a 'person' entitled to the
 protection of the Equal Protection Clause of the Fourteenth Amendment.
 Santa Clara County v. Southern Pacific R. Co., 118 U.S. 394, 396 (1886)..."

 Then he went all the way back to the time of James Monroe's presidency to
 re-describe how the Founders and the Supreme Court's then-Chief Justice
 John Marshall, a strong Federalist appointed by outgoing President John
 Adams in 1800, viewed corporations. Rehnquist wrote: "Early in our history,
 Mr. Chief Justice Marshall described the status of a corporation in the
 eyes of federal law:

 "'A corporation is an artificial being, invisible, intangible, and
 existing only in contemplation of law. Being the mere creature of law, it
 possesses only those properties which the charter of creation confers
 upon it, either expressly, or as incidental to its very existence. These
 are such as are supposed best calculated to effect the object for which
 it was created.'..."

 Rehnquist concluded his dissent by asserting that it was entirely correct
 that states have the power to limit a corporation's ability to spend
 money to influence elections (after all, they can't vote  what are they
 doing in politics?), saying:

 "The free flow of information is in no way diminished by the
 [Massachusetts] Commonwealth's decision to permit the operation of
 business corporations with limited rights of political expression. All
 natural persons, who owe their existence to a higher sovereign than the
 Commonwealth, remain as free as before to engage in political activity."
 Justices true to the Constitution and the Founders' intent may wake up to
 the havoc wrought on the American political landscape by the Bellotti
 case and its reliance on the flawed Santa Clara headnote. If the Court
 chooses in the next few weeks to hear the Kasky v. Nike case, it will
 open an opportunity for them to rule that corporations don't have the
 free speech right to knowingly deceive the public. It's even possible
 that this case could cause the Court to revisit the error of Davis's 1886
 headnote, and begin the process of dismantling the flawed and
 unconstitutional doctrine of corporate personhood.

 As humans concerned with the future of human rights in a democratic
 republic, it's vital that we now speak up, spread the word, and encourage
 the ACLU and other pro-democracy groups to help Marc Kasky in his battle
 on our species' collective behalf.

Thom Hartmann is the author of "Unequal Protection: The Rise of Corporate
 Dominance and the Theft of Human Rights."


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